L&G optimistic for UK economy in 2007
Investment company Legal & General Investment Management (LGIM) has predicted a generally good year for saving and investment in 2007.
Speaking at a conference in the City of London, LGIM’s strategist Julien Garran said “above-consensus growth” and “below-consensus inflation” will see a benevolent economic environment for UK investment.
“The recent rise in immigration and the sharp rise in older people working has had a profoundly positive effect on the UK economy,” Garran said. “This could lead to a re-rating for those companies with predominantly UK-based earnings and is good news for UK investment overall.”
Garran went to say that several markets had performed “exceptionally well” in 2006, notably the credit and emerging markets, although he expressed caution about their prospects in the coming 12 months.
He was also upbeat on US prospects, especially the American share markets and on the real likelihood of a strengthening dollar. “I believe that it is the service-based economies of the UK and the US that will take over from the emerging markets to drive the global economy, and the global markets in 2007.”
He continued: “For saving and investment this is all good news, and 2007 will see a change of leadership in the world economy in the ways I have outlined.
“However, given the major surprises we have had this year, especially the extraordinary and unexpected downturn in the Japanese market and a consumer slump there, those intending to participate in global and UK investment should expect other developments.”